It’s that time of the year again when many people ask “where did the year go?” and furiously try to wrap up projects, crank out potentially unnecessary production, create plans and budgets for next year, and perhaps start reflecting on the past twelve months. Why? What is so special about the calendar year?

Over a decade ago Steve Player did a presentation at a Lean Accounting Summit where he challenged us to stop “budgeting to an arbitrary wall” – the end of the calendar year. That resonated with our team (which included our CFO), so we went back to our company and announced we were stopping budgeting altogether, and would instead make the best financial decision at whatever point in time we were at. It was a dramatic, and positive, change for our company. We also took the concept a step further. We tried to no longer constrain projects to arbitrary timeframes like “years” or “months,” but instead determined was was an appropriate, and challenging, target for completion.

Early in most lean journeys companies learn to stop trying to maximize production at the end of a calendar month just to “make the month look good.” Instead, production is matched to demand, regardless of time frame.

For many organizations a subsequent and similar hurdle is to get over the fear of insufficient demand. Traditional companies like having sufficient demand in the following month to ensure the operation is fully loaded, but as they remove waste and streamline processes their lead times may shorten to less than a month. This is good – but can be a bit gut-wrenching not having the next month “filled.” The increased value to the customer almost always creates a good outcome, and over time the confidence is regained. The importance of the arbitrary concept of “months” decreases.

I’m trying to become more cognizant of when I put activities into arbitrary time blocks, and I even attempt to minimize the impact of time altogether. For example, I stopped wearing a watch years ago and recently I’ve even stopped wearing my Fitbit. Having my phone in my pocket is sufficient for when I really need to know the time, and is remote enough so I’m not continually aware of it.

My wife and I are currently in Hawaii for twelve days (not two weeks!) to celebrate our 20th anniversary. We’re staying on the north shore of Oahu, right on the Banzai Pipeline beach where world class surfers are participating in the Vans World Cup of Surfing. It’s spectacular to watch right from the house we’re renting, especially a few days ago when there was a monster swell. It took a little getting used to waves far taller than our house coming right at us, but then breaking and flattening, ending just a few feet from the deck. Somewhat unsettling, especially at night.

Surfing competitions are interesting as they are completely dependent on weather, which destroys any attempt to align with time. The competition only takes a couple days, but is scheduled for two weeks. Each morning the organizers determine if conditions are right and make a call as to whether it will be held. If it is, then the competitors, judges, spectators, press, and support services such as food vendors and traffic control, are notified. A complex logistics chain must remain flexible, independent of time, ready to respond within just a couple hours.

A similar defocusing on time can happen to us as individuals. Consider the difference between chronological and biological age. Some of us are lucky enough to have a biological age considerably younger than our chronological age – or at least it feels that way. Yet we make decisions on our future based on our chronological age.

My father in-law worked hard his entire life, and unfortunately due to a biological age that was older than his chronological age he passed away just a couple years after retiring from GM. He was unable to enjoy a long retirement filled with the travel and projects he was looking forward to. In some cases you can influence your biological age while in some, such as with my father in-law and his battle with brain cancer, you can’t. But how could decisions change? Although I feel like I’m in good health and great shape, I know I don’t know everything. So I try to live life to the fullest, every day, and not put off new experiences.

Time can be an appropriate measure of progress or relative change, such as my anniversary or a reduction in manufacturing lead time. Time can be a valuable tool, but as with most concepts in lean it is just that – a tool. It needs to be used deliberately, judiciously, and only after understanding the “why?” it is needed.

For example, I do use the pomodoro method to be more productive, and I have a 30 minute hourglass on my desk. I have found that removing all distractions and focusing on a single task is more productive and hence adds value. However, I do not try to constrain the task to 30 minutes – that is just the amount of time I will focus solely on it. Some tasks take more time, some less.

I have also found that a deliberate and planned reflection activity is powerful every four to six weeks. It is not a “monthly” activity anymore (it used to be), but is based on what I have found to be a timeframe that allows both sufficient activity and with sufficient recall of the past. I do not constrain the reflection to a set amount of time, but go through a planned set of questions. As I begin to organize more around kata experiments driving toward a desired end state, this reflection process may change again.

So at this arbitrary time of the year, think about how time influences you. Where does it unnecessarily create constraints? Does it add value? If not, how will you change your relationship with time?

The treatment of people with severe mental illness often means locking them away in large, impersonal facilities or letting them bounce between short stays at in-patient units at major hospitals, followed by a rapid decline of functioning sometimes resulting in homelessness, then back again. This is especially true for psychotic disorders such as experiencing hallucinations and hearing voices. It’s a broken, ineffective system with minimal respect and compassion for the patient, and hasn’t changed much in centuries. The only real change is that the patients are now highly medicated, often further hindering recovery. Many psychiatrists don’t believe a full recovery from severe psychotics disorders is even possible.

My wife is a therapist at a small non-profit organization that operates facilities for the severely mentally ill, usually including psychotic disorders. Their approach is radically different, with “community members” (not “patients”) living in an actual home in a small town, with full-time support via a trained “room mate” and therapists that spend several hours at a time with the community member. Their entire purpose is to help community members help themselves by understanding their issue, confronting it, and overcoming it – while living in society. It’s not traditional therapy, but more just being with them as a supporting companion. The person is treated as an equal, and respected to the extent that they are included in all treatment meetings.

The program is very expensive, not covered by insurance, and due to the highly respectful and individualized regimen, is difficult to scale. But it is also very effective, with lasting results.

To further understand the concepts behind the program, my wife is reading one of the foundation texts, Recovering Sanity by Edward Podvoll. I always like to explore and learn something a bit different, so I thought I’d read it too. The author tells several stories of people who have been able to fully recover from severe psychotic disorders by becoming self-aware and confronting the psychosis on their own.

One such person was John Perceval, who was an English nobleman in the very early 1800s. He began to hear voices, started to listen and respond to them, and consequentially was institutionalized in an asylum for several years. He goes through a cycle of first listening to the voices, responding to and being guided by them, then being self-aware enough to doubt the voices. Those doubts create moments of clarity that allow him to confront the “spirits and demons,” and after a lot of hard work and introspection he is then eventually able to fully recover. But the system doesn’t believe recovery is possible, so it takes several more years before he is released.

Upon his release he sues the asylum, various doctors, and even his mother for malpractice. Perceval publishes the detailed notes he kept (and hid) while institutionalized, leading to public awareness of the problem. He goes on to found a patient advocacy group that was very successful in changing the English laws to support, respect, and show compassion for the patients. This included mandating a judicial review before confinement, improved conditions inside hospitals, treatment regimens that include using homes and keeping families and especially children together, and standardized care models backed by outcomes and science, not societal fear and paranoia.

This was in the mid-1800s, in England. And he was building off of similar changes that had already taken place in France a couple decades earlier. How little has changed since then, and perhaps we’ve even regressed.

The core concept driving my wife’s organization is a rejection of “asylum mentality.” Asylum mentality is the traditional method of exerting power over others, in this case “therapeutic power” which leads to “therapeutic aggression” that can thwart the process of recovery. Instead the patient, the community member, is respected as an equal, and is supported while he or she actively confronts the psychosis.

It’s a much longer process, but far more sustainable as the person learns how to take individual corrective action when relapses occur. There is also the recognition, and acceptance, that recovery is non-linear. Setbacks are to be expected, and learned from.

In a way, that’s analogous to a lean transformation (and I don’t really like that term – it’s a journey). The ones that are the most solid and sustainable take a long time, but the organization understands the underlying concepts. It is not just a set of tools that can be thrown at a problem, perhaps by a consultant from outside the organization, but a true understanding of why it is being done. What is the problem or opportunity and what is the appropriate tool for that specific circumstance? What is the next experiment being run within a scientific PDCA problem-solving framework? It’s the power of owned understanding versus simply being told what to do.

That’s not the only analogy. Another one has to do with observation, which is critical to both recovering from psychosis and a lean transformation. Consider what Podvall, and indirectly Perceval, say in Recovering Sanity:

Asylum preserves what is called “non-reciprocal observation.” One is observed without being able to observe properly. One’s state of mind – mistakes, awkwardness, and transgressions – is catalogued, diagnosed, and studied; whereas one’s own observations are held in suspicion and doubt and are called unsound, resistance, arrogance, transference, and the like. An examination by the insane of their conditions, including the state of mind and therapeutic intentions of all their caretakers, is more or less prohibited. It is a situation bound to evoke paranoia.

So when a leader goes to the gemba and observes the process, is it non-reciprocal or reciprocal? Is just the leader observing or are others involved? What lenses, or biases, is the observer limited by? Is the patient, the people working at the gemba, involved? Are they being heard, respected, and shown empathy and compassion? Are they being taught to observe, to learn, to own, and to confront and fix the problems?

Supporting, respecting, and encouraging the patient to observe, understand, and take action to confront issues is what makes change effective and sustainable.

I will take time to be alone today. I will take time to be quiet. In this silence I will listen… and I will hear my answers. – Ruth Fishel

Last Memorial Day weekend, while the rest of the country was enjoying the roar of the Indy 500, screaming crowds at the NBA playoffs, or just noisy families, I was sitting in complete silence – by myself. Three nights and nearly four full days, with much of that time sitting on the bench you see in the photo above.

Regular readers know I work hard at cultivating a process of personal reflection, and I’ll take a couple days a few times a year to get away. This past weekend, on fairly short notice, a “room” opened up at the New Camaldoli Hermitage, a Benedictine monastery only about 50 miles north of me on the dramatic Big Sur coastline of California. It wasn’t my first time at a monastery, but it was the longest stay – and the first one where total silence was required of the dozen “retreatants” that stay with the fourteen monks.

Total really means nearly total. If you want to speak with a fellow retreatant, you head down the two mile driveway to the Pacific Coast Highway. After just a few hours I removed the battery from the clock in my room as the faint tick-tock was unbearable. The only human-created sound is the church bell that rings before prayer services four or five times a day beginning at 5:15am, and you can attend to hear the monks chanting the Psalms. I did several times as the spiritual energy puts some aspects of life into perspective. You can also request spiritual guidance from a monk, which would be verbal while in a private room. I did, as I’ll describe below.

I put “room” in quotes because the accommodations are decidedly minimalist. A tiny room, single [very hard] bed, desk, and a half bath. You share a shower. The monks provide one cooked meal each day at noon which you take back to your room to eat, and you can use the well-stocked kitchen to snack at other times. It’s your responsibility to make your bed, clean your room, do your dishes, and take your towels and bedding to the laundry at the end of your stay. There is no TV, phone, cell service, or internet, so you are completely cut off. Your room isn’t locked. Not my usual travel expectations, but perfect for this experience where I wanted to simply reflect on what I really need and want in life.

The monks from the Order of St. Benedict are a great bunch, and I’ve always admired their particular tradition of contemplative spirituality. They find a lot in common with eastern meditative traditions like Buddhism, and in fact, the Hermitage bookstore is filled with books on other faiths, particularly Buddhism. There were even books that I considered too new-agey for even my granola-munching legal-cannabis-toking Californian mindset. I was still a little surprised to find a Dhammapada in my room, in addition to the Bible.

One of my favorite authors, in addition to Trappist monk Thomas Merton, is Benedictine monk David Steindl-Rast, who coincidentally spent some time at the Hermitage. Steindl-Rast has studied and written extensively on the commonalities between aspects of Christianity and Buddhism, and even has a fantastic TED Talk on the power of gratitude. Pretty spry guy for being over 90, eh? If you just have a couple more minutes, skip the rest of this post and go watch his talk. I devoured several books by Steindl-Rast, Merton, and Thich Nhat Hanh on this trip.

I’ve long felt that a regular habit of intentional reflection is a very powerful component of effective leadership – both professional and personal. Back in my corporate days I’d take my executive staff offsite for a quarterly retreat where we’d spend the morning reflecting on how we were doing vis-a-vis our principles and strategies, then in the afternoon we’d spend time together interacting on a more personal level, which is when some of our most brilliant ideas arose. Having it at a winery a mile away, with the free-flowing amenities you can imagine, helped everyone feel comfortable participating.

Before I go on a retreat I set some goals and create a rough schedule. This time I wanted time to reflect on various aspects of my life – personal, professional, health, friends, family, and so forth. I also wanted time to do quite a bit of reading, and I especially wanted time to just sit. It’s in those times of sitting, in solitude and silence, when I often have the greatest insight. Jon Miller has written severalarticles on tips for doing hansei – reflection – which I also reviewed.

Over those four days I took nearly thirty pages of notes in my journal. I had several insights on how issues I thought were a big deal were in reality far less significant, and on aspects of my life that I thought were unimportant really should be more important. I reviewed old goals and created new ones, decided on activities to start, and perhaps most importantly, what I should stop doing. One of my favorite books, Greg McKeown’s Essentialism, was part of my reading at my reflection in Panama a couple years ago, and the concepts have stuck.

I did meet with a monk for “spiritual guidance,” but in my case the guidance was directly related to my reflection. He was intrigued with my reflection process (because, done right, it really is a defined process), and offered a great suggestion to take time to intentionally reflect again on the thirty pages of notes from my reflection. I took his advice, and after a few hours I had a new distilled and condensed set of notes that added even more clarity and direction. That second level of hansei is something I’ll incorporate into my regular reflection from now on.

As is usually the case, my wife immediately noticed the difference when I returned home. She knows how important this process is to me and encourages me to take a few days alone every so often. Or maybe she just enjoys having the house to herself for a bit.

Do you have a process of personal reflection? If so, is it really a defined and intentional process? I believe it is a critical component of effective personal and professional leadership. Consider my process and Jon’s tips I linked to above, but it’s important to make it your own. Then take some time and reflect. You’ll be amazed at what you learn and the clarity it creates. If you’re up for it, try doing it in silence, perhaps at your nearest monastery! But you’ll find it really hard to beat the view at the Hermitage!

I’m not talking about statistics or the interpretation of statistics. We all know that different perspectives can be “created” from otherwise accurate data to tell any story. Just ask anyone in Washington – from any side.

I am talking about numbers that don’t accurately reflect underlying conditions, or numbers that don’t relate to the reality of the process owners.

As one example, here’s a photo from my local gas pump here on the central coast of California, just today. As my brother in-law remarked while visiting from Michigan last week, “that’s not per gallon, right?” Yep, per gallon, typical for all gas stations around here, and yes far more than most other parts of the country are paying.

Most Californians are used to it, most U.S. visitors from outside of California just look wide-eyed, and most visitors from Europe still go “wow, that’s cheap.” But how many understand that while everyone pays 18.4 cents in federal gas taxes, each state is radically different in terms of state gas taxes… taking California’s gas tax to over 60 cents a gallon, among the highest in the country? How many understand that California requires a special gas formulation in the summer, produced only at in-state refineries, reducing scale and increasing risk from at-capacity refinery downtime, contributing to nearly an extra dollar per gallon in cost?

My point isn’t whether this price is too high or not – perhaps our air is cleaner due to special gas and perhaps our roads are better due to higher taxes (my brother in-law actually thought so) – but having the basic information in order to analyze that value relationship. In order to create simplicity, a laudable goal, critical information and knowledge is lost.

Another example: home water use is typically measured in “units.” Here’s one article from last Sunday’s paper on water usage here in California, obviously a popular subject. What the heck is “25 units of water?” To make matters worse, a “unit” is different in different parts of the world. Here in the U.S. it’s typically 100 cubic feet, or 748.5 gallons. Elsewhere it’s a cubic meter, or 220 gallons.

But who relates to a “unit?” Here in California, where we’re being asked to reduce water usage by 25%, how do we relate to the numbers we see on our monthly bill? I’m being asked to reduce water use from 10 to 7.5 “units.” Whatever. But ask me to reduce by 1871 gallons a month and I start to think about shorter showers, low flow toilets, changing from grass to a more natural drought-tolerant landscaping, and so forth. Especially if my cost for those 2.5 units is about to skyrocket.

I understand it, I own it, and I can learn how to improve.

One final example: individual income taxes. Romney stepped into it a bit during the last election cycle by stating that 47% of taxpayers pay no federal taxes. A little misleading as all except for 14% (primarily the elderly) do generally pay federal payroll taxes for Social Security and so forth – just no direct federal income taxes. Still, the point that nearly half of taxpayers don’t contribute to a general expenditure bucket they have voting control over and receive benefits from is an interesting point outside the scope of this post.

But how many of those 47%, and even the rest, really understand how much taxes are being paid and especially how they are being used? For the vast majority of people taxes are simply lines on their pay stub, generally ignored, and an annual reconciliation effort where they are often excited that they gave a loan to the government and now get it back, without interest. Probably even more so now that paper pay stubs are becoming a rarity, and people have to take action to log into a system to review an online pay stub. How many really do that? How many can tell you how much they pay every two weeks in federal, state, Social Security, disability, and other taxes?

The net amount becomes the reference value. Just like the gross amount is the reference value for gas prices.

Those of us who are self-employed or own companies are a little different since we have to actually cut a physical check to the Feds (and state) each quarter. Ouch! Now it becomes reality, and you start to be very interested in how much it is and how it is used. Although it would be a bureaucratic and compliance nightmare, perhaps everyone should have to physically write a check, withdrawing real money from your account, instead of simply accepting the net deposit? If you have to give up the equivalent of a vacation, a dinner, or even a beer to make that payment, it becomes real.

Ownership, understanding, and learning is created.

So be careful with simplifying numbers. While simplification is a great goal, too much simplification may remove knowledge and create dangerous ignorance.

The following is not an advertisement, even if it sounds like it. I will admit I am a big fan of Uber and use the service pretty much anytime I travel. Now that they’re in my relatively small town, I might start using the service instead of paying for airport parking, especially on longer trips.

After dozens of rides I have yet to have a negative experience. The cars are new and clean, the drivers well-dressed and polite, and the cars arrive on time and within minutes of being requested. In Seattle a few weeks ago the car was a new Tesla, a few weeks earlier in Jacksonville it was a BMW 7 series. The convenience of having the financial transaction handled by the app eliminates the need for cash and negotiation. Sound like any taxi ride you’ve had? Ever? Nope. Welcome to disruption.

This misnomer of “sharing.”

Services like Uber, Airbnb, and others are often called the “sharing economy.” That’s an incorrect characterization. No one is sharing – both parties are out to obtain value. Micro-scale demand is being matched with micro capacity. Such demand and capacity has always existed, however it took real-time computational power to match them in a dynamic fashion that creates value for both parties.

Instead of a batch of taxis prowling the streets in search of fares, a single limo driver with an hour to kill between assignments can now fill that gap – that capacity. Hence why you often get nice rides like Teslas and BMWs with drivers in suits. At peak times fares go up, incenting an increase in capacity to match the increase in demand… instead of making the demand wait for hours in the rain.

The value to our environment.

The impact of this micro-scale demand and capacity matching is huge – and one that should be embraced by capitalists, socialists, and environmentalists alike. Uber, as of six months ago, is providing one million rides per day (yes, per day). Airbnb has over one million rooms in its portfolio, and is doing 37 million room-nights per year of bookings. More that some of the world’s largest hotel chains. And that’s last year’s data.

How many fewer cars, guzzling gas and expelling fumes, are on the streets because of the short-term capacity of unused limos and even private vehicles being freed up? One million rides a day equates to a lot of cars. How many fewer hotels, consuming utilities whether empty or full and contributing to urban heat islands, have been built because of the micro capacity of unused private rooms being freed up? 37 million room-nights is a lot of hotels.

The value is growing, but isn’t all roses.

New such services are being created every day. You’ve seen all of those cranes and other pieces of construction equipment that sit idle for days at a time? No longer, thanks to Yard Club. Tutors, house cleaners, private aircraft. You name it. Have a short term availability? Match it to someone that needs it now. Sometimes it can go even deeper, such as with same-day delivery services partnering with the likes of Uber and Lyft to further improve their efficiency and reach.

Sure there are issues, although many of those are more political than real. Uber’s background checks are more extensive than taxi drivers… except in some key states and countries like California and South Korea. Airbnb does pose an issue for cities resting comfortably – until now – on hotel room tax receipts. Those problems will eventually be resolved, just like they have been in the past when innovation disrupts the status quo. Sometimes it won’t be pretty, at least for a while.

The potential value to you and your organization.

But let’s take the concept of matching micro capacity and micro demand to an even more immediate, direct level. Where do you have a few minutes of potential capacity in your day that can be filled by creating value – recognizing that value is sometimes the mindful pleasure of just sitting on a beach or enjoying a long lunch? Where can what seems to be larger chunks of demand by a group in your organization be divided and filled by smaller chunks of capacity?

How do most meetings, CYA policies, ego, and lack of training or even trust affect your ability to match internal organizational demand with capacity? Does your organization look like a batch of beat up taxis driving around in search of demand, or smartly-dressed drivers in BMWs efficiently filling a few minutes of available time with a person willing to pay above par for that value?

Some of the more interesting internet-driven companies these days are the likes of Airbnb and Uber. They call themselves part of the “sharing economy.”

But let’s take a look at the word “share.” From the MacMillan dictionary, share is “to allow someone to have something you own.” Is that what’s happening here? Not really. It’s not free.

There is a small unit of demand in the form of a single room or a single car ride, and there’s a small unit of availability in the form of a room in a house, an apartment, an empty cab, or even someone with a car going in the same direction. The are matched, a value is being transferred, and there’s also a financial transaction representative of that value. That’s really micro supply and demand management.

Previously such small units of supply and demand were never taken advantage of, let alone optimized, unless aggregated. Now internet connectivity and computational power can dynamically and efficiently track, match, and transact such small units.

Since its founding, in 2008, Airbnb has spearheaded growth of the sharing economy by allowing thousands of people around the world to rent their homes or spare rooms. Yet while as many as 425,000 people now stay in Airbnb-listed homes on a peak night, the company’s growth is shadowed by laws that clash with its ethos of allowing anyone, including renters, to sell access to their spaces.

Over 400,000 rooms – on a single night. That’s the equivalent of over 3,000 average size hotels. Empty space that was being wasted, now going to good use, eliminating the need to build 3,000 hotels. Think about the positive impact on the environment, urban sprawl, energy use, and so forth.

Similarly, in March 2014, seven months ago and a lifetime in the timescale of a hypergrowth company, Uber was providing 1.1 million rides per week. In this case it is only partially displacing the required capacity of the old business model, taxis, as many taxi drivers are switching to the Uber platform. Still, think about the impact of that optimized micro capacity and demand utilization on the required supply of taxis – and hence steel, plastics, and gas.

I happen to be a big fan of Uber, and use their service almost every time I travel. The speed, convenience, and ease of transaction creates significant value. Yes, their business practices may make me hold my nose a bit.

Other companies are looking at similar concepts. Amazon is looking at using micro units of delivery capacity in the form of taxis and Uber competitor Flywheel to provide same day – and perhaps same hour – delivery.

Very large numbers of previously wasted supply units being matched with demand in a very efficient manner. The batch unit of a large delivery truck, a bus, or a hotel is being broken down into units approaching one. Obviously any change like this doesn’t come easily, and cities – often dependent on bed taxes – are pushing back on Airbnb while traditional taxi services are pushing back on Uber. But value is being created in an efficient and popular manner, therefore change will occur.